AT&T, U.S. telecom groups seek to block new Internet rules

WASHINGTON (Reuters) - AT&T Inc, CenturyLink Inc and U.S. telecom and cable industry groups called for regulators to block parts of new rules for Internet service providers on Friday, citing “crushing” compliance costs and threats to investment.

In filings with the Federal Communications Commission, the industry did not ask for a suspension of the principal “net neutrality” rules that ban Internet providers from blocking and slowing down web traffic or from striking deals with content companies for smoother downloads.

Instead, the groups and companies sought to block the agency’s move to reclassify broadband Internet as a more heavily regulated telecommunications service, and a new broad general conduct standard that prohibits Internet providers from “unreasonably interfering” with consumers’ access to the web.

While the requests are expected to be rejected by the FCC, they pave the way for the industry to ask courts to pause the implementation of the rules while they are being litigated. The new regulations go into effect on June 12.

After a year of intense debate over how to best regulate Internet service providers, the FCC now faces several industry lawsuits over the proposed rules in different courts. It is not clear yet which court will ultimately get to hear the arguments.

The FCC on Thursday asked to transfer the pending cases to the U.S. Court of Appeals for the District of Columbia Circuit, which has twice rejected its previous versions of net neutrality rules but last year confirmed its authority to set Internet regulations.

Cable and wireless companies earlier argued they didn’t oppose the principles of net neutrality, such as no blocking of any traffic, but rejected the tighter regulatory regime. Friday’s filings offer the most specific details yet of the arguments they are expected to make in court.

The documents cited testimonials of executives at regional and local Internet providers that the rules will create costly compliance burdens and limit resources for improvements to broadband networks or new products.

The filings said that the complexity of the rules would be “crushing” for small broadband providers with limited human and financial resources, pointing to the risk of immediate lawsuits and additional burdens from new privacy protection demands.

AT&T executives said that it would cost the company about $400 million in lost revenue to end current marketing practices in order to set up new procedures for compliance with the tighter, though yet unspecified, privacy protection requirements for broadband providers.

The filings came from the USTelecom Association, CTIA-The Wireless Association, National Cable and Telecommunications Association, the American Cable Association, AT&T, CenturyLink and the Wireless Internet Service Providers Association.